Shannon Polymers uses straight-line depreciation for financialreporting purposes for equipment costing $700,000 and with anexpected useful life of four years and no residual value. Assumethat, for tax purposes, the deduction is 40%, 30%, 20%, and 10% inthose years. Pretax accounting income the first year the equipmentwas used was $800,000, which includes interest revenue of $21,000from municipal governmental bonds. Other than the two described,there are no differences between accounting income and taxableincome. The enacted tax rate is 25%. Prepare the journal entry torecord income taxes. (If no entry is required for atransaction/event, select "No journal entry required" in the firstaccount field.)
